Collection Pilot Evaluation

by: Ryan Brown, Senior Budget and Policy Analyst

Introduction

The County Clerk has operated a successful collections program for more than seven years, resulting in a substantial increase in cash collections related primarily to misdemeanor court fines and fees. The Division acts to immediately perform credit checks, payment counseling, and enforcement of individuals who claim they are unable to pay fines and fees. This intervention normally occurs before an individual leaves the building following their sentencing.

In FY96, an experimental program was initiated to see if uncollected amounts owed the County through the Justice of the Peace Courts could be reduced through the same techniques that had proven to be successful when applied to County Criminal Courts. Four Justice of the Peace Offices (Cercone, Ritter, Sholden and Jasso) agreed to direct individuals who could not make immediate payment to the Crowley Courts Building location of the County Clerk's Collection Division. This program was designed as a pilot program that was to be evaluated after a period of time concerning its effectiveness. Initial evaluations seemed to show that the Justice of the Peace Courts in the program had a better collection percentage than the Justice of the Peace Courts not included in the program. However, the Office of Budget and Evaluation had not developed a comprehensive method to evaluate the effectiveness of the program and the program was not expanded to include all the Justice of the Peace Offices

This operational analysis will examine the success of the three-year pilot program with regard to its cost effectiveness, i.e., to provide a judgment on the likelihood that the increased expense of the staff effort added to the County Clerk's operation has been exceeded by the increased collections.

Part II of this operational analysis will include a through review of the staffing level of the Division, once the Court makes a decision on the continuation of the Justice of the Peace collections effort.

Description of Current Program

The expansion of the County Clerks Central Collections Program to include the Justice of the Peace Courts was conceived based on the success of the program with the County Criminal Courts and the fact that the collections "client" from a J.P. Court would be identical to a client from a County Criminal Court insofar as the collections methodology is concerned. The program was developed as a pilot in that the collections task force realized that there were some differences in the collections programs, primarily that the clients from the Justice of the Peace would have to travel to the collections location while the County Criminal Courts clients were already in the building.

As part of the expansion, one data entry clerk (grade 6) and half of an interviewer/collector (grade A) were added at an FY2000 cost of $42,989. In addition, the County Clerk Collections has been utilizing two to three extra help employees (FY2000 cost: $31,800) to assist with the workload that was added. There was no staffing decrease in the Justice of the Peace Courts to offset the cost which resulted in an increased Justice of the Peace Collection cost of $74,789.

Several times over the years the Office of Budget and Evaluation reviewed the Justice of the Peace Pilot Collections Program and based on the fact that the collections for the four courts in the program showed an increase over the collections in the courts not in the program the Office of Budget and Evaluation felt that the collections program appeared to be effective in increasing collections. However, the methodology used was relatively simplistic and the conclusion at the time was to leave the program in place pending a more thorough study.

Evaluation Methodology

In order to better determine the effectiveness of the pilot collections program, the Office of Budget and Evaluation selected two courts who use the collections program (Cercone and Sholden) and two courts who do not use the collections program (Terry and Blackington) and requested that they each maintain a log of 50 deferred-payment cases over the same time period. Once the cases were identified, the information was provided to the Office of Budget and Evaluation.

After 110 days (allowing time for the collection of monies) the Office of Budget and Evaluation looked up each case on the computer to determine the following:

1) if the person had made any payments

2) if the person had finished making payments

3) if the person was current in their payments

4) if the person was behind in their payments

Results and Discussion

The following table summarizes the data collected:

unction

Completed Payment

Current on Payments

Behind on Payments

Never Paid

Uses Collections

61% of Cases

6% of Cases

5% of Cases

27% of Cases

Does Not Use Collections

67% of Cases

6% of Cases

4% of Cases

23% of Cases

Note: only 8 of the 100 people sent to collections did not appear.

One possible distortion of the above comparison occurs whenever a defendant has cases in multiple courts that use the collections program. Since the collections program combines all of the cases against a defendant, any payments made are recorded on the first courts cases first. As a result a defendant could be making payments on cases but when the Office of Budget and Evaluation reviewed the data it looked like the defendant had not made any payments. Staff at the County Clerk Collections Division reviewed the data provided by the Office of Budget and Evaluation and discovered two such instances, if credit was given for these cases, the percentage of cases current on payments would increase to 10% and the percentage of cases never paid would decrease to 23%. Since non-collections courts are only concerned with their cases they do not make payment exceptions because the person is paying on a case in another court.

As can be seen from the data the two Courts that are not in the collections program have a higher percentage of cases with completed payments, an equal percentage of cases current on their collections and a lower percentage of cases behind on payments and a lower percentage of cases that have not paid anything. This data seems to show that the collections program for the Justice of the Peace Courts is no more effective than the collection programs operated by the courts themselves.

The Office of Budget and Evaluation also looked at the make up of the cases (traffic and hot check) to determine if the data was biased due to the weighting of the type of cases. The following table provides a detail of the type of case and the percentage of collections:

Function

% of Hot Checks

% of Hot Check Collections Complete

% of Traffic

% Traffic Collections Complete

Does Use Collections

84%

63%

16%

42%

Does Not Use Collections

64%

64%

36%

64%

As can be seen by the data the courts in the collections program have a higher percentage of hot check cases versus traffic cases. However, their collections rate for hot check cases were 21% higher than their collection rate for traffic cases. This results in an overstatement of the overall collection rate for the collections program. Assuming an equal distribution of each type of case the collections program collection rate would be 52.5% instead of the 61%. Additionally, the collection rate for the non-collections group was the same for each type of case.

Since the amount assessed is handled by the individual court it is not affected by the collections program so there is no reason to believe that the collections program collects more money per collections completed.

Other Observations

Even though the Justice of the Peace Pilot Collections Program does not have a higher collection percentage than the non-collections courts. There are several issues that should be addressed.

A) The County Clerks Collections Division collects a significant amount of information about the individual in the collections program. If the person stops making payments on their obligation, this information makes it easier for the Constable to locate the person. If the collections pilot program is discontinued the Justice of the Peace Courts that do not collect additional information on the defendant should develop a form to allow them to do so, as this will in the long-run increase collections without a significant amount of additional work.

B) The Justice of the Peace Courts in the collections pilot program do not have to track payment plans and receipt each payment. While the Justice of the Peace Courts in the collections program did not have a decrease in their staffing there was a decrease in the amount of workload. During FY2000 the Office of Budget and Evaluation will be reviewing the Current Justice of the Peace Staffing Standard. If the collections pilot program is discontinued all of the courts will be handling collections cases in a similar manner making the review of the staffing standard slightly less complicated. As part of the review of the Justice of the Peace Staffing Standard the Office of Budget and Evaluation will be able to advise Commissioners Court how much manpower is used to handle collections by the Justice of the Peace Courts.

C) All four Justice of the Peace Offices reviewed currently assess the $25 collection fee on cases when the defendant will require more than 30-days to complete payment. Current legislation allows Judges to assess a $25 collection fee on cases where the defendant will require more than 30 days to complete payment. Additionally, three of the Justices of the Peace Courts (Cercone, Terry and Sholden) have chosen to not assess the $2 transaction fee that was authorized as of September 1, 1999. Commissioners Court may want to suggest to the Justice of the Peace Courts whether or not to collect the $2 transaction fee in order for there to be consistency among all of the Justice of the Peace Offices.

D) The data complied by the Office of Budget and Evaluation shows that an aggressive and efficient Justice of the Peace collection process is as effective as the County Clerk's Collection Program. As such, the Office of Budget and Evaluation will document the processes used by Justices of the Peace Terry and Blackington and provide this information to any Justice of the Peace that would like the information.

Collections Staffing Impact

When the Justice of the Peace Pilot Collections Program was implemented, Commissioners Court authorized the County Clerk Collections Division half of an interviewer/collector and one data entry clerk. Commissioners Court has also authorized the County Clerk Collections Division $38,100 in extra help to process collection plans. If the Justice of the Peace Pilot Collections Program is discontinued the Office of Budget and Evaluation recommends that the extra help funds be deleted effective the date the Justice of the Peace Courts stop sending new cases. The additional full-time positions should be continued for a minimum of 90 days. This will allow the County Clerk Collections Division staff to process the bulk of the Justice of the Peace cases currently in the system.

During the next 90 days the Office of Budget and Evaluation will review the staffing of the County Clerks Collections Division and make a recommendation concerning the proper staffing. Since the start of the Justice of the Peace Pilot Collections Program the County Clerk Collections Division has or will start collecting for the following courts without any additional resources a) County Criminal Court Number 11, b) County Criminal Court of Appeals will start hearing regular cases and using collections, and c) County Criminal Court Number 3 Judge Schwille was not part of the Collections Program but Judge Wyde has joined the Collections Program. As a result the County Clerk Collections Division feels the full-time staff added for the Justice of the Peace Pilot Collections Program is needed even if the pilot program is discontinued.

Financial Impact

As part of the expansion of the County Clerk Collections Program to include four Justice of the Peace Courts one data entry clerk (grade 6) and half of an interviewer/collector (grade A) were added at an FY2000 cost of $42,989. In addition, $38,100 in extra help has been Budgeted in FY2000 for the collections program. Discontinuing the extra help positions effective November 1, 1999 save will $34,925. There was no staffing decrease in the Justice of the Peace Courts so discontinuing the Justice of the Peace Pilot Collections program would not increase the staffing costs in the four Pilot Justice of the Peace Offices.

Recommendations

The data collected and evaluation by the Office of Budget and Evaluation shows that the Justice of the Peace Courts in the Collections Program and the Justice of the Peace Courts not in the Collections Program have substantially the same collection rate. Therefore, the Office of Budget and Evaluation recommends discontinuing the Justice of the Peace Collections Pilot Program. As such, the Office of Budget and Evaluation recommends that the four Justice of the Peace Office in the pilot program discontinue sending cases effective November 1, 1999 and that the extra help positions funded in FY2000 be removed effective November 1, 1999.

Should the Court agree with this recommendation the Office of Budget and Evaluation further recommends that the techniques used by Justices of the Peace Terry and Blackington to collect unpaid amounts be detailed and made available to any Justice of the Peace who seeks to improve their collections.

It is further recommended that the Court comment on the appropriateness of collecting both the $25 collection fee and the $2 transaction fee.

The Office of Budget and Evaluation further recommends that the appropriate staffing level of the County Clerk Collections Division be reviewed over the next 90 days and that the second part of this operational analysis be presented to Commissioners Court in February 2000.